To Buy Or Not To Buy

In a down market, smart buyers want to buy at an absolute low. ‘Bottom fishing’, so they say. But no one knows for sure though when is the bottom until after it is over. Since timing the property market is intriguing, buyers have bought across all the price spectrum, including at their highest peaks in 1996 and 2013.

To buy low and sell high, isn’t that what we are supposed to do?

Do buyers regret not buying during the crisis of 1986 and 1998. Of course some do, but the likelihood that prices will return to 1998 or 2004 levels is minuscule. Never say never, though. Should this scenario present itself, then know for sure, not just Singapore but the whole world economy is in a depressed state.

“Prices have softened so much, that downside is limited. If they wait any further, they can miss the boat,” commented an analyst.

Is downside really limited? Is 8.4% drop really 'that much'? Why the contradiction, when only a short while ago, so many, many industry players were predicting dips of 15% - 20% or more. Something has to give, since the narrative is always changing and so fast at that.

From (Q3 2013 to Q4 2015) private residential home prices are down 8.4 per cent from their recent peak. HDB prices have declined 11.1 per cent (Apr 2013 to Jan 2016). A home price trend has clearly emerged. No drama here – price falls are gradual, not dramatic.

Amidst loud calls for rolling back some of the property cooling measures, the authorities have came out openly to say that now is not the time. Their rational:

Stabilising the property market for economic purposes;

Government’s intent to ensure affordability of homes for those who have not bought;

Preserving the wealth of those who own homes.

So there you have it. It is official policy not to wreak havoc on household net worth or the economy. Though some are hoping for housing prices to go down even more.

As for the upside potential, it’s anyone guess when that will happen.

To buy or not buy now, well it’s your call.

If you intend to buy, here are some tips to go by:

Buy within budget and create a buffer for unforeseen circumstances

Hire a real estate agent to benefit from their profession expertise and to defend your interest.

Strategic Funds Targeting Distressed Homes In Singapore

Joining the likes of private-equity funds by Blackstone and SC Capital Partners, SiS Asset Management (SiSAM), a unit of Hong Kong-listed SiS International has set up a maiden fund to target distressed residential assets in Singapore, swooping in on undervalued or distressed homes a softening property market here.

The fund known as the SiS Real Estate Opportunity Fund will not only explore other residential, commercial and hospitality assets in Singapore but also in other key Asian markets such as Japan and Hong Kong. In Singapore, due to loan curbs, the commercial property sector has also suffered.

The plan is to buy and spruce up these properties, reposition their tenant mixes and then exit them at a profit, or reinvest that capital into other properties, or return capital early to investors, before the five-year deadline to avoid seller stamp duties. stamp duties.

Unlike other typical real estate private equity funds, this platform has a much more conservative assets under management target of S$50 million. It comes with a five-year term plus two additional one-year extensions.

It is targeting individual accredited investors by offering them smaller minimum subscription denominations of S$200,000 each.

Since the property market has not taken a decisive turn for the worse, even though underlying economic growth has slowed, the industry’s calls – louder by the day – to roll back some cooling measures may not be the right thing to do just yet.

Here is why.

Reversing some of the cooling measures now could:• Potentially fuel speculation that more easing is on the way.• Threaten to undo any price moderation the market has achieved - a 8.4% correction (Q3 2013 to Q4 2015) versus over 60% price gains achieved between 2009 to 2013.• bring back potential buyers who have been bottom fishing.

DTZ reported that 87 properties were put up for mortgagee sales last year, an 85 per cent surge from 47 units in 2014. In 2012, only nine units were listed for mortgagee sales as a result of owners’ inability to finance their loans.

Such listings are on the rise, but are they widespread enough to signal a downward spiral of the property market?

Mr Song Seng Wun, economist at CIMB Private Banking:“The market has softened, but we haven’t seen people throwing in the towel, we haven’t seen distressed sales. Underlying labour market condition is still supportive of people being able to service their loans.” “If the Government were to ease curbs, that would be seen as the first step to further easing. This could induce a return of speculative activities. There could be risks to underlying growth in terms of people more willing to take on debt when there could be a turn in the economic fundamentals.”

MORE URGING GOVT TO TWEAK MEASURESRenewing its calls for the Government to roll back the measures, the Real Estate Developers’ Association of Singapore said last month that developers face pressure from measures such as the Additional Buyer’s Stamp Duty (ABSD) and Qualifying Certificate, which impose hefty charges on developers with unsold units.

Valid Concerns But The Market Isn't ReadyThe concerns of an over-correction are valid. Getting the property market right is especially important now, so as to not add stress to an already slow economy. However, more signs are pointing to the need to retain these measures.

“Has the market reached the stage of stability? Perhaps there is still some way to go before the trigger level could be hit. The stock level and vacancy rate, though, have risen recently; the price adjustment has not fully reflected the oversupply situation,” said Sing Tien Foo from NUS Department of Real Estate.

Walking A Fine LineBesides stabilising the property market for economic purposes, it’s also the Government’s intention to ensure affordability of homes.

Maintaining affordability for those who have not bought a home and preserving the wealth of those who own one is the government’s challenge.

“it is not easy to determine what is the optimal time to remove the measures because policymakers need to gauge with confidence what is the reasonable price level given the dynamic nature of the market,” Sing said.

Last month, Minister for National Development Lawrence Wong reiterated the Government’s stance that it is “too early” to relax the measures, as doing so could result in a market rebound.

Responding to increasing calls for the cooling measures to be tweaked, the Government has maintained that it is not time yet to roll back the measures. But It also hinted that it has a “rough idea” of when to do so.

At present, a minimum paid-up capital or deposit of S$1 million is imposed on a housing developer to qualify for the issue of a sale licence. The revised rule will impose a paid up capital ranging from $1 million to $4 million, depending on the size of the housing project.

The sizes of completed projects in a developer's track record will determine how large a project it can now build. Illustration: if the completed housing project cited in its track record has fewer than 10 units, a developer can obtain a sale licence to develop only a new project of fewer than 50 units.

Non-residential projects will not be admitted as a track record for a sale licence, given the differences in developing residential and non-residential projects.

For housing developers applying for a sale licence based on the track record of their companies, at least one of the directors who had completed a licensed project cited in the track record must remain on board as a director of the company.

The new rule will make it harder for aspiring developers with limited track records to build and sell private homes and put smaller players under financing constraint.

Qualifying Certificate

Qualifying Certificate (QC) is a rule imposed on foreign developers - including Singapore developers listed here but with foreign shareholders.Under the QC rule, foreign developers of private residential projects will need to pay extension charges pro-rated to the proportion of unsold units, if the projects are not fully sold two years after obtaining the Temporary Occupation Permit (TOP).

Developers paid the Government $24.9 million in extension fees last year for failing to sell all units at their residential projects within the stipulated time frame.

Estimated QC charges for projects if units remained unsold by the year end:

$38.2 million for Nouvel 18 – Developer: CDL and Wing Tai Holdings

$15.2 million – TwentyOne Angullia Park- Developer: China Sonangol

$22 million - d'Leedon and The Interlace – Developer: Hotel Properties and CapitaLand.

The Credit Suisse's report was based on last available data of unsold units as at 31 Dec or earlier; It does not include recent transactions concluded this year.

QC extension charges paid out by developers

Year

QC Charges

2011

$380,340

2012

$4,950,920

2013

$17,810,860

2014

$29,976,300

2015

$24,906,160

Fees collected since the implementation of Qualifying Certificate (QC) extension framework in 2011Source: Singapore Land Authority; Straits Times

Additional Buyer Stamp Duty (ABSD)

The ABSD rules, introduced in December 2011, require developers to build and sell all new units within five years of a site's contract purchase date or pay a 10 per cent levy - later raised to 15 per cent for sites bought from Jan 12, 2013.

The Credit Suisse report also pointed to Michaels' Residences and Robin Residences as being affected by ABSD remission claw-back this year.

Since it is unlikely that the number of unsold units remain static, ABSD fees will move down as developers continue to move sales.

Ministry of National Development (MND) has trimmed development charges for large swathes of the real estate market. Development charges were trimmed for four of the five major use groups - commercial, non-landed residential, hotel or hospital uses and industrial use.

Development charge is a tax that is levied for permission granted to carry out development projects that increase the value of the land. These charges are reviewed half yearly, in March and October.

Rates for landed residential use remained unchanged.

‘Under pressure from demand and supply imbalances in the office / retail sector and cooling measures from the residential front, the cut is not unexpected,' said Research Head at CBRE, Desmond Sim.

Industrial SectorDC rates fell the steepest for the industrial sector – averaging down 3.1%. The Tuas / Choa Chu Kang / Kranji area dropped the most – a 16% decline.JLL’s Chua sees the decline in industrial DC rates as “in line with market expectations.”

Commercial SectorRates for commercial use corrected down 2% on average due probably to the weakening CBD rental market.DC for Central Business District (CBD), including Raffles Place, Bugis and Marina Bay dipped 5%.

Residential SectorDC Rates for non landed residential use fell 1% on average owing to underlying weakness in the residential market, noted Dr Chua Yang Liang, JLL research head for South-east Asia.

DC for Core Central Region (CCR) of Chatsworth / Bishopsgate / Jervois Road sector dipped 3.9%. DC for Newton Circus, Goodwood Park / Balmoral dipped 3.8% DC for other sectors in District 9, 10, 11 and Downtown Core dipped between 1.6% and 3.6%. Several areas in the Bukit Timah, River Valley Road and Sentosa saw a decline of 4% in the residential sector.

DC rate as a component of the entire land price is usually less than 10 per cent.

The slight rate decline is "not going to move the needle and make an unviable en bloc sale a viable one," said JLL international director Karamjit Singh.

With the general market stymied by overwhelming economic and financial concerns, the marginal reduction in DC rates becomes moot.

Owners are facing increasing hurdles refinancing their homes because of falling property values, stringent definitions in what constitutes income and demanding paperwork.Owners seeking refinancing have also to deal with smaller loan quantum as a result of conservative property valuations.

More home owners are also opting to switch from floating to fixed rates due to rising interest rates, or re-price to lower rates anticipating the Sibor (Singapore interbank offered rate) to spike further.

Banks are not disclosing numbers, but said the percentage of customers unable to refinance is insignificant.

According to an independent mortgage adviser, about 25 out of 300 cases it advised in the last six months could not refinance due to their inability to meet either the bank's credit assessment criteria or the total debt servicing ratio (TDSR).

Refinancing may not work for everyone. Incurring additional fees or shorter loan tenure with higher monthly repayments may just put some owners off.

Since the TDSR framework kicked in, refinancing has become a headache for many, even with the three-year grace period for mandatory compliance until June 30, 2017.For example, those who had funded their property with the help of a guarantor in the past are also now required to remove the guarantor as a mortgagor.

Loans with tenures based on the younger applicant's age will become subject to income-weighted age computation. The inclusion of other purchases such as commercial properties also affects loan limits, especially the stricter 30% mortgage servicing ratio which applies to owners of HDB flats and executive condominiums.

Meanwhile, not every bank has adopted in entirety the list of financial assets suggested by the Monetary Authority of Singapore (MAS).Some banks do not recognize stocks deposited with the Central Depository, others do not accept stocks held with foreign exchanges, yet others do not accept cash held jointly with a third-party non-mortgagor.

You get the picture. Generally it means loan limitation and stricter credit assessment criteria.

Though some observers link such refinancing issues to higher possibility of default risks closer to the 2017 deadline, banks say it is far-fetched to presume so, as the connection is tenuous.

According to MAS, the percentage of borrowers that currently breach TDSR limits is not high.

CapitaLand is all set to test the luxury residential property market with its Cairnhill project launch.

The integrated project on the former Somerset Grand Cairnhill site, opposite Paragon along Orchard Road, will comprise a 268-unit residential tower “Cairnhill Nine”, and a 220-unit serviced residence Ascott Orchard Singapore. Both will be completed in end-2016.

Units at the 99-year leasehold project are priced attractively at an average of $2,500 psf which would fetch closer to $3,000 psf under better market conditions, said CapitaLand Singapore chief executive Wen Khai Meng, although he declined to say if Cairnhill Nine was among several projects for which CapitaLand made a $110.1 million impairment last year.

About 89% of the units are one- to two-bedroom units, sized from 592 to 1,324 sq ft. Starting prices are from $1.35 million for a one bedder to $3.68 million for a four bedder.

Adjusting to the times"As a real estate developer, you have to ride through the cycles. Whether it's good or bad times, life has to go on…We do our best to adjust to the demands of the market at each point, whether in terms of pricing or unit sizes," added the chief executive.

When the project was designed, market demand had already shifted in favour of smaller units - as opposed to when the company was building The Orchard Residences, Urban Resort Condominium and Urban Suites in the area, said Mr Wen.

In redeveloping the site, which is zoned residential and commercial, CapitaLand did not opt for a pure serviced apartment play as it could be too large for the market. As it stands, though, owners of apartment units will be able to enjoy some of the services at Ascott, such as the concierge service, or even request for housekeeping.Investors and locals who like the buzz of the area may find the project appealing. A VIP preview will be held this weekend while a public launch should come next month.

Other CapitaLand's projects coming up for launch in the first half of this year are The Nassim and Victoria Park Villas.

Singapore authorities may just take its foot off the brakes and relax some property curbs this year, said Kwek Leng Beng, the billionaire executive chairman of City Developments Ltd (CDL), which built luxury condominiums such as the St. Regis Residences near the Orchard Road shopping belt.

Mid-income and low-end housing could see further price declines and the high-end market remains subdued, he added.

“They will press the button at the right time although developers are hoping they will do it sooner than later,” Kwek said. “I think they will do something this year, that’s my speculation, as there are a lot of mid- and low-end homes coming up. I suspect it will be the abolishing of the buyer’s stamp duties.”

Singapore has succeeded in taming record home prices with a slew of property cooling measures which included capping mortgage loan financing to 60% of a borrower’s monthly income, higher stamp duties on home purchases and an increase in real estate taxes.

Home values have dropped 8.4% from the peak in 2013 and sales have since declined to about half the level that year.

A major Japanese bank - The Bank of Tokyo-Mitsubishi UFJ (BTMU) - is in advanced talks to lease about 140,000 square feet of office space at Marina One, in spite of a generally subdued leasing market. BTMU currently occupies about 150,000 sq ft of office space in Republic Plaza. Though the take up space in Marina One is 10,000 sq ft lesser than at Republic Plaza, BTMU does not see it as a contraction of the bank's footprint, owing to more efficient space usage at the new development, due to bigger floor plates.

BTMU could be one of the first major office signings at M+S's Marina One project.

Marina One development will embrace 1.88 million sq ft of offices on levels 5 to 30 in two towers. Office floors in the East Tower will range from 35,000 to 43,000 sq ft, while those in West Tower will be 32,000-42,000 sq ft. The two towers will be connected on levels 28 and 29, creating 100,000 sq ft per floor.

According to industry insiders, gross effective monthly rents for big office occupiers at Marina One would probably be around $7 to $8 psf.

Meanwhile, Mitsubishi UFJ Securities, another entity of MUFG now sited in Republic Plaza, may join BTMU in migrating to Marina One.

Outside the CBD, Johnson & Johnson (J&J), a multinational corporation currently based at The Strategy in the International Business Park in Jurong East, is said to be finalising a lease for at least 170,000 sq ft of business park space at Ascent in Science Park 1 which will be completing this quarter. The lease is understood to be a long-term commitment of 10 years. J&J

According to market analysts, J&J could pay a gross effective monthly rental of about $5 to $6 psf at Ascent on a blended basis for the duration of the 10-year lease, against the approximate $3.50 to $3.80 psf it would pay if it will to renew its lease at The Strategy. However, for J&J, the relocation move could signify a flight-to-quality to a newer development, with an expansion built in.

Ascent located near Kent Ridge MRT Station, is a 7-storey building developed by Ascendas Land Singapore. It has a total net lettable area of 490,687 sq ft, of which about 90% is business park space.

Abott has signed a lease for about 100,000 sq ft at the Duo. Abbot looks to consolidate its three locations - HarbourFront Centre in the Telok Blangah area, VisionCrest along Penang Road and Gateway in Beach Road - into one. MasterCard has also inked a 70,000-sq-ft lease at Duo, and is expected to exit Gateway.

Meanwhile, Guoco Tower has clinched Dnb Asia, a shipping and offshore financing solutions provider that is currently housed at the nearby Axa Tower, for a space of about 15,000 sq ft.

The musical chairs trend started to emerge last year, though most of the actual vacating of space will happen in 2017 and possibly 2018 because these tenants are precommitting to space in new buildings that will be completed in the second half of this year and early 2017.

The key drivers for this migration to newer office developments are a flight-to-quality and occupiers consolidating from a few locations. Addtionally, landlords of new developments are offering attractive rental terms to select tenants amid the competitive leasing environment.

The office leasing deals that are currently brewing are mostly expected to be renewals or relocations, rather than involving new entrants and expansions. This implies little growth, if any, in net demand for island-wide office space.

Some foreign banks and tenants in the resources sector are in retreat and the overall weak global economic outlook is also denting office demand. This, coupled with the surge in new office completions over the next year or so, will continue to create downward pressure on rentals.

The spotlight now will be on the likes of ING, which is also in Republic Plaza, to see if it stays put or moves to a new development. In Centennial Tower, McKinsey & Co is mulling over whether to stay or move.

The World Bank, which is said to occupy about 16,000 sq ft at Marina Bay Financial Centre 2, is being courted by several landlords. The bank is understood to be looking for a bigger space of about 30,000-50,000 sq ft either in the same building or a new project.

There is still keen leasing interest in the market despite the economic uncertainty.

The 12th annual Demographia International Housing Affordability Survey has ranked Singapore housing as seriously unaffordable with a grading index of 5.0.Measuring the affordability of 87 metropolitan housing markets in 9 countries, the report found Hong Kong to be the least affordable at 19.0 in the housing affordability index.The survey ranks affordability based on the “median multiple” in each housing market.

Property cooling measures have successfully kept the prices of HDB flats and private homes in check in Singapore.

Affordability for new homes have further improved owing specifically to a moderate reduction in homes prices and an elevated supply of public and private homes coming onstream currently.

Singapore has by far been ‘more successful’ in its measures in governing housing affordability, as against other markets employing the British urban containment model.

Against this backdrop, markets with serious housing affordability issues include places like Hong Kong, topping the chart at 19.0, while Sydney, Vancouver, San Jose, Melbourne, Auckland, San Francisco and London reaching levels between 8.0 to 12.2, the report said.

Blue street lights are believed to be useful in preventing suicides and street crime, a finding that is encouraging an increasing number of railway companies to install blue-light-emitting apparatus at stations to prevent people from committing suicide by jumping in front of trains.

2000 - in Glasgow, Scotland, the number of street crimes in areas illuminated in blue noticeably decreased.

2005 - Nara prefecture, Japan, crime rates dropped about 9% in the blue-illuminated neighborhoods set up by the prefectural police in 2005.

According to the company, a few people attempt to commit suicide every year at the station. Since the blue lighting was introduced, no suicide attempts have occurred at the station.

Professor Tsuneo Suzuki at Keio University said: “There are a number of pieces of data to prove blue has a calming effect upon people. But It’s a little risky to believe that the color of lighting can prevent anything.”

Leveraging on the buying momentum in recent launches, developers have succeeded in offloading a bunch of unsold units by trimming prices.

Brief take up of unsold units

The Panorama moved 60 units of the 80 units released between Oct and November last year. The recent discount rate relative to launched prices is about 6% to 7%.

The Panorama by Wheelock Properties is a 99 yr leasehold project in Ang Mo Kio Ave 2. It sells close to 30 units a month on average. The average sales price for the Panorama is about $1,229 psf.

Sky Vue in Bishan by CapitaLand sold 80 units of 182 units released last November.

CapitaLand has dangled carrots of up to $150,000 discount for the rest of the units at Sky Vue across all unit types. The recent discount rate at Sky Vue is approximately 6%.

‘The Sky Collection’, Sky Vue’s premium units from 28th floor up is lauded as homes with a panoramic view.

Sky Vue is a 99 yr leasehold project along Bishan St. 15. Prices start from $821,000, $1.1 million and $1.6 million for a 1 / 2 and 3 bedroom respectively. The number of unsold units is down to about 100.

The 694 unit Sky Vue development was first launched in September 2013. It sold 433 units during its first month at a median price of $1,401 psf.

According to The Edge, top sellers among existing launches were Sims Urban Oasis on Sims Drive and Lakeville in the Jurong Lake District, which recorded 94 and 38 caveats respectively in 4Q 2015.

Launched in April 2014, Lakeville is close to Lakeside MRT station, Jurong Lake and the Canadian International School. The 38 caveats lodged averaged $1,260 psf.

Singapore has over 30,000 registered real estate agents. Relative to the volume of deals, the number of agents is ten times the volume of monthly transactions, according to the Institute of Estate Agents.

By comparison, in Australia’s New South Wales, 1,840 agents handle an average of 8,160 monthly transactions in Sydney, according to CoreLogic Inc.

Amidst cooling measures and fierce competition in a slowing property market, some property agents are going the Uber way to make ends meet in Singapore, according to a Bloomberg report.

"The market is slow because of the cooling measures. We have no choice, we have to come up with means to make ends meet," said Loh, who started out as a realtor in 2008 but turned to driving for Uber last October, to pay the bills. For Loh, his income has dwindled to an average monthly taking of S$3,000, a far cry from the up to $30,000 commission he could get in a single deal during the peak of the property market boom.

Uber is an American international transportation network company that allows consumers to book a trip for a taxi or private car via smartphones through the Uber mobile app.

Though property agents often juggle between jobs in what is a notoriously cyclical business, things don’t look so good in Singapore, where home prices fell by the most among the world’s major markets last year. After seven years of government intervention to cool prices in Asia’s second-most expensive housing market, a plunge in sales volumes is hurting real estate agents even more than price declines.

Knight Frank Global House Price Index which tracks 55 global residential markets showed that home prices in Singapore declined 4.3% in the 12 months ended Sept. 30, more than in Hong Kong, China, Japan, and Australia,

Since 2012, total property transaction volumes in Singapore have plummeted about 68% with developers managing about 7,000 new homes sales last year, according to SLP International Property Consultants.

Institute of Estate Agents is offering training courses in other jobs, such as property management to help agents cope and supplement their income.

Trading was suspended on Chinese markets after stocks tumbled 7% in the first trading of the year. The Chinese are using this tool, designed to limit the fluctuations of securities, for the first time. The fall from Asia led to a slump in European stocks as well.

The blue-chip CSI300 index ended down 7 percent by the time the trading was halted, the Shanghai Composite Index lost 6.9 percent and the technology-driven Shenzhen Composite fell by more than 8 percent.

Triggering FactorsThe market plunge comes after an official manufacturing survey, focusing on larger, state-owned Chinese companies, showed a fifth month of contraction, and a similar private survey focusing on smaller firms, indicated a 10th consecutive month of shrinking manufacturing.

Another factor is the imminent removal of a ban on major shareholders from selling stakes, which was put in place during the summer stock crash and is expected to be lifted Friday. The ban was put in place in July as Chinese stocks were falling fast. They have since rebounded 20%.

"The slump apparently triggered intensified selling, while the triggering of the circuit breaker seems to have heightened panic, as liquidity was suddenly gone and this is something no one has experienced before. It was a stampede." said Gu Yongtao, a strategist at Cinda Securities.

The Chinese tumble and the accelerated depreciation of the yuan drove markets elsewhere in Asia into the red. Japan’s Nikkei Stock Average fell 3.1%, Hong Kong’s Hang Seng Index fell 2.7% and South Korea’s Kospi lost 2.2%.

European markets slumped Monday, with the pan-European STOXX 600 down over 2.4% and Germany’s down over 4%. London’s FTSE 100 performed better, losing 2.4% while France’s CAC 40 was down over 2.6%.

In a report by Prosper Australia, Melbourne, Australia’s second largest city, growing numbers of local landlords and absentee overseas owners focusing on price gains and forgoing rental income have resulted in locked up homes.

Some 82,724 properties, or 4.8% of the city's total housing stock, appear to be unused, an estimated occupancy rates derived by gauging water usage. In the worst-hit areas, a quarter of all homes are empty, said Prosper.

The study assessed 1.7 million residential properties in and around Melbourne during 2014. Those using less than 50 litres of water a day - the rough equivalent of one shower and a flush of a toilet - were deemed vacant.

Driven by a wave of Chinese buyers and record-low interest rates, average home prices have soared to about A$700,000 in Melbourne and around A$1 million in Sydney.But with prices now cooling, the empty accommodation also masks a hidden glut of supply that could worsen any housing slump.

Sydney, where high-rise blocks have sprouted in the inner suburbs, is also likely to have a vacancy problem. Surging home prices triggered a boom in high-rise construction in Melbourne's inner-city suburbs, squashing rental yields and leaving landlords with little incentive to find a tenant, said Cashmore."There is a wall of money that is trying to get into Australia," Cashmore said. "To fight those forces is going to be very difficult."

Sudden property price declines or an economic slowdown could well unveil the vacant supply, when owners would start to sell up or look for rental income.

By year end, Manhattan luxury seekers will have more than 2,000 newly built rental apartments to pick from.

Moinian Group's Sky, New York City’s largest rental tower will debut in just days ahead. Moinian is leveraging the leasing market in a bid for priced-out buyers. The 71-story tower is Moinian’s bet that leasing demand and prices will continue to rise as would-be buyers remain shut out of a sales market that offers few choices for residents who are not multimillionaires.

The first tenants will move into luxury Sky Tower at 42nd Street and 11th Avenue next week. It's the borough’s largest, single multifamily building, with 1,175 units. It features two outdoor pools, a pet spa, and a regulation basketball court.

Leasing of some 300 apartments started in June with rents starting from $3K for a studio to $6.2K for a 2-bedder.

Sky's perks for a stand-alone city includes a hair and nail salon, a café offering three meals a day, a billiards lounge, a landscaped garden and concierge services.

“Sky is the most impressive rental building ever built in New York City, and we believe the market will continue to respond to that very well as they have since we opened for leasing.” Moinian said. About half of the tower’s currently available apartments have found tenants.

“It’s not easy to buy in New York, and that’s true more than ever today. That’s leading to a lot of renters. It’s a renter’s world,” according to Mitchell Moinian, senior vice president.A growing pool of tenants has pushed Manhattan rents up more than 18% since the recession ended in June 2009. The November vacancy rate of 2.87% is the highest since August 2006, according to Jonathan Miller, president of appraiser Miller Samuel.

Over 6,700 newly built rental apartments will come on stream at market rates next year, the most since 2005, according to Citi Habitats. Most of the units will be priced in the top 10%, or luxury tier of the market, said Gary Malin, president of Citi Habitats.

Indonesia has revised its tax system on luxury properties according to a new ministerial decree.Luxury tax for properties in Indonesia is now ‘Value based’ rather than the old practice of ‘Size based’.

Singapore property developer CapitaLand is unfazed by a slowdown in Chinese economic growth. It is expecting record home sales for its China mainland projects this year.

Chief executive Lucas Loh of CapitaLand China is optimistic:"We are still confident about China... The key thing underpinning our optimism in China is urbanisation trends and its large population. Even at about 6% to 7 % economic growth, China has good prospects for real estate over the next 10 to 20 years," "China is going through a major transformation and moving towards a service-oriented economy... Tier 1 and upper Tier 2 cities will continue to benefit from urbanisation trends which will create demand for real estate." "CapitaLand is in a unique position given our presence here, our understanding and team of people on the ground... It puts us in a strong position to ride the growth."Indeed tenants at its malls in China have been notching up improved sales of about 9% year on year.

China accounts for about $21.4 billion or 46% of the group's total assets - more than the $17.4 billion or 37% in Singapore. It is comfortable if this proportion goes up to 50%, said president and group chief executive officer Lim Ming Yan.

CapitaLand's business is focused on Tier 1 and Tier 2 cities in five clusters: Beijing-Tianjin Shanghai-Ningbo-Hangzhou-SuzhouGuangdong- Shenzhen Chengdu-Chongqing Wuhan

It had racked up about 6,492 units or 11.6 billion yuan (S$2.6 billion) in home sales at the end of the third quarter and could hit about 8,000 units or about 14 billion yuan by the year end, a record for the company, said Mr Loh.

It aims to drive return on equity (ROE) for its homes by tapping into trends, including the recent liberalisation of capital markets, he said. For example, it is considering issuing onshore corporate bonds.

Other major Chinese developers have been doing so with attractive interest rates of mostly about 4.25% to 4.5% a year.

Other ROE drivers include enhancing project execution by, for example, managing costs. "Residential pricing growth rate has slowed down, so (we are focusing) on project execution to maintain project margins we have set for ourselves," said Mr Loh.

Replenishing the land bank is also key, although the company noted that prices have run up by as much as 30% year on year in Tier 1 cities, according to recent tenders.

Even as CapitaLand focuses on Tier 1 and major Tier 2 cities for residential sites, "it will be increasingly more competitive with many local developers refocusing their strategy back to these cities... having experienced difficulties in Tier 2, 3 or 4 cities in the past few years", he said.

Projects which have delivered better margins tend to be on land acquired through joint ventures, or mergers and acquisitions - which it will aim to do again. Urban renewal sites are also possible, such as its Datansha Island project in Guangzhou.

The company has also racked up a tidy slate of malls in China, having opened about 54, with 10 more on the way. Sales growth by tenants has been in the high single digits across all tiers of cities, said Mr Chan Kong Leong, CapitaLand Mall Asia head of regional investment, asset and fund management.

It could reconstitute its mall portfolio - as in CapitaLand Mall Trust's (CMT) acquisition of Bedok Mall last month, or CMT's sale of Rivervale Mall to a third party - especially as the group looks to focus on the five city clusters, though that depends on whether the opportunity is there.

Chinese mall operators have also been attempting to integrate online with offline, with partnerships announced this year between Intime and Alibaba, as well as Parkson and Dianping.com. Mr Chan said its malls will stay competitive as it engages shoppers online with platforms such as WeChat and its CapitaStar rewards programme. The group is also aiming to cross-sell products online eventually.

CapitaLand has several more Raffles City projects lined up till 2018, with phased openings of two developments in Hangzhou and Changning scheduled for next year. Oversupply is an issue in some cities. Raffles City Hangzhou is in a new central business district with three Grade A office projects handing over this half year. But Mr Loh said the firm is committed to holding its more premium prices for some offices it is strata-selling.

"While there are many office buildings, there is only one Raffles City... With the completion of the mall next year, and the leasing of the office building that we are keeping for the long term, that will enhance traffic and confidence. Eventually, the strata units will be able to find buyers at the pricing we want."

CapitaLand's serviced residence arm Ascott has been scaling up in China as well. It owns and manages 80 properties with more than 14,300 serviced residences there, and is set to meet its target of 20,000 units by 2020, said Ascott North Asia managing director Kevin Goh. Alliances, such as its joint venture with online apartment-sharing platform Tujia.com this year, will help growth. Since listing its Chinese properties in September, Ascott's revenue from the site has been doubling monthly, he said.

Mr Lim said, as a whole, the group is happy with the group's progress towards ROE targets of 8 to 12 per cent over the next few years. This is achievable for stabilised investment properties and trading properties, which can generally give that level of return - ROE can be double-digit for the Chinese residential market, for example, although the Singapore residential market has been more challenging.